A new report on vehicle insurance in B.C., and how rates are more expensive in nearly every other province, is facing criticism.
The report, done by Ernst and Young, was released last week, with ICBC issuing a press release with the headline ‘B.C. drivers pay among the lowest auto insurance rates in Canada.’
The 42-page report compared various scenarios of drivers and their insurance rates. In all, there were 30 profiles across nine provinces, with Quebec being the exception.
However, shortly after the report was issued, two insurance agencies came out and said the report “should be taken with a grain of salt.”
“Any time we see a monopoly insurance company putting out a report extolling the virtues of a monopoly company, we should really take it with a healthy dose of skepticism,” said Aaron Sutherland, vice-president of the Insurance Bureau of Canada.
“And this latest report from ICBC is no exception. To that, it presents a skewed picture of prices across the country in comparison to itself.”
Sutherland said there were holes in the report, such as why Quebec wasn’t included.
In the report, it was noted that “information at the granular level of detail required for the comparisons was not available in Quebec.”
The report also noted that rates from other provinces were collected from a broad sample of quotes obtained online.
“ICBC is comparing a no-fault insurance market with markets where you can still sue for pain and suffering,” said Sutherland. “That’s not really an apples-to-apples comparison.
“But there is one province in Canada that is a no-fault province but also has competition of choice, and that’s Quebec. That was the one province that ICBC omitted from its comparison and I think that was deliberate.”
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Sutherland claims the average driver pays $900 a year for vehicle insurance in Quebec, while the average B.C. driver pays $1,200.
“If you want to talk about what is a more effective auto insurance system under a no-fault model, it’s pretty clear that Quebec is where we should be looking,” said Sutherland.
Another alleged error in the report: It didn’t include the lowest rates in giving an average total and discounts, like bundling and safe driving, were declined.
Page five of the report shows rating assumptions, including how discounts were declined.
“I don’t know about anybody else, but when I shop around, I take the lowest price for the same product, not anything higher,” said Sutherland.
“And it’s no difference in auto insurance, so it’s a bit perplexing that ICBC did that.”
Barry Haggis, president of the Brokers Association of Alberta (IBAA) and a brokerage owner in Alberta, says he took four examples in the report and quoted them in his markets.
“My findings were that, in every case, I was able to produce a quote that was significantly lower than the premiums published in the ICBC report,” Haggis told Global News.
In a statement, the IBAA said it believes the report declined all discounts offered in Alberta, which drove the quoted premiums higher, and that it did not use a licensed insurance broker.
“More can, and should, be done to improve the affordability of auto insurance in Alberta,” said the IBAA, “but such discussions should be based on facts, not misleading arguments put out by the proponents of public auto insurance.”
Global News reached out to ICBC for comment.
“Keeping ourselves and British Columbians informed about how our auto insurance rates compare to the rest of Canada is part of ICBC’s commitment to transparency and accountability,” Brent Shearer of ICBC told Global News in an email on Thursday.
“That’s why in 2021 and 2022, we commissioned the third-party consultant Ernst and Young to compare the rates of nine provinces including ours. The report was supported by provincial auto insurers in Manitoba and Saskatchewan. We plan to continue this work on an annual basis.
“Quebec was not included in the EY report because Quebec’s detailed information required for comparison purposes was not available. This is clearly stated in both reports.”
He also said “any suggestion ICBC is somehow being misleading with how the information is presented is untrue and unfounded, particularly since the reports were carried out by a third party.”
Lastly, Shearer pointed out that “even if the focus had been on the lowest cost of auto insurance in each city instead of an average, B.C. cities would still largely be more affordable than comparable cities in Alberta and Ontario.”
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